I do not know you financial situation at all. But my wife and I were in a similar situation a couple of years ago. And it basically boils down to two things:
1) You are parents. That means sometimes doing things you do not particularly like to make sure that your kids will have a reasonably stable upbringing - aka you can pay for stuff.
2) Regardless of what you do, it is easier to get the next job if you are employed.
No matter how you end up dealing with your situation, remember your wife. Help her, listen to her and be there. In a year or two you will have moved on, and this will just be another story to annoy your kids with.
Best of luck!